Want to Invest in Indian Government Bonds – Learn more about RBI Bonds and Bond market of India.

India – progress and development is thy name! And the same stands true for the Indian economy, more so for the ‘bond market’. An innovation of the recent past, asset-backed securities have grown to be a pivotal part of the corporate debt market. Floating rate instruments, convertible bonds, step redemption bonds, zero coupon bonds – these and many more such instruments are today being acknowledged country-wide.

A decade back, banks like ICICI and IDBI began issuing step bonds. While those of the ICICI Bank paid a higher rate of interest, those of the IDBI allowed clients to pay the redemption amount in instalments after an initial holding period. In addition, the approach of maturity of ICICI step bonds clearly showed the benefits of bond issuance in India, while IDBI step bonds had two put and call options before maturity. All these have provided a range of securities that have helped in maintaining a sought-after risk return balance. Due to these corporate issuers, preference has changed from public issues to private placements.

Upon comparing the equity market with the bond market for the past decade, we find that the equity market saw a drop of almost 14% of GDP – slumping from 42% in 1993-94 to 28.6% in 2000-01. Au contraire, the Government of India bonds (GOI bonds) enjoyed an increase of about 8% of GDP – from 28% to 36.7% – in the same period. As a result, there appeared a reduction in liquidity in the equity market and a substantial increase in liquidity in the Indian bond market.

But don’t get stupefied with the impressive statistics of the GOI bonds. Every coin has two sides. Similarly, there are some drawbacks to the Indian bond market also. The GOI bond market doesn’t use trade as an exchange and features a bilateral negotiation between dealers. The market hence, lacked price time priority. To top it, bilateral negotiations imposed credit risk on participants narrowing the market with a homogeneous credit risk.

The Indian bond market, however, is today at par with some of the leading markets of Asia like Korea. The grapevine is that in a few years, the Indian bond market will be counted as a renowned market of the world.

We feel proud to recognise the bond market of India better than that of China. And this is definitely an evidence of Indian economy’s quick progression. Moreover, the Indian bond market is profitable to almost anyone and everyone. The new business houses especially find the Indian market profitable from an operational point of view. That is pretty obvious as they have been able to initiate business in a very short time span and generate capital easily.

The liquidity of the Indian debt market has helped both the market as well as the various companies operating in it. But, for the market to sustain itself, and that too in an international level requires capital. Luckily, the Indian debt market has been able to attract enough companies.

Every market has its highs and lows. For the Indian market, the fixed income market is counted in the former. As stated before, the Indian economy is considered better than the Chinese economy, and the fixed income market is one amongst many reasons for this. Experts expect the bond market in India to grow manifold and become one of the biggest in the world in perhaps another decade or so.

One of the best secondary bond markets of Asia is that of India. It has a high amount of liquidity. The market is an establishment of sixteen primary dealers who underwrite the sales of the debt of the Government of India and deal with India’s apex bank, the Reserve Bank of India, directly. As icing on the cake, some bonds in the secondary market have maturity period of as long as thirty years!

Invest in Indian Economy – The Booming Stock Market

NriInvestIndia.Com is an upcoming Financial Organization helping NRIs, OCIs and PIOs worldwide to invest in Indian Mutual Funds and Stock Markets. After being in business for almost half a decade it brings to its customers plethora of expertise in investment advising and latest market news and products. Needless to mention that individual customer attention and prompt response is the USP of this financial firm. Few of the services offered for NRIs, OCIs and PIOs are mentioned below:

NRI Services offered:
  1. Mutual fund investments in India
  2. Online Stock trading account
  3. Demat Account
  4. De-materialization of physical shares
  5. Commodity Trading (Trade Commodities of India)
  6. Derivative Trading – Futures & Options
  7. ESOP Conversion (Convert your ESOPs in India into Shares)
  8. PIS account
  9. Non-PIS account
  10. Pan card Assistance
NriInvestIndia.com keeps up to date information about NFO’s in the market and provide a wide platform of well doers like Reliance Mutual Funds, HDFC Mutual Fund, Birla Sunlife Mutual Funds, ICICI prudential Mutual Fund, Principal Mutual Fund, Tata Mutual Fund, UTI Mutual Fund, SBI-Magnum Mutual Fund, Kotak Mahindra Mutual Fund. A methodical categorization of clients investment profile and investment objective is done before forming the investment portfolio and recommending specific mutual funds.Trading account offers real time online access to NSE allowing clients to place instant orders. It also offers Portfolio Management Services for High Networth Clients. A package of Trading account, demat account , PIS and Non-PIS account gives customers one stop shop for there investing needs.At NriInvestIndia.Com, a customer wont be charged high consulting fee merely because of his NRI status, therefore offering competitive value for money.For further details as to how to invest in India and open an NRI Account, please visit www.nriinvestindia.com

Can non-resident take back the money they invested in India?

When an Indian leaves India (be it for studies or work or permanent settlement) he/she becomes a NRI, and his/her bank account is re-structured as a NRO Account. Till now, money from such an account could not be used in the country of residence. But this has changed. In terms of Master Circular No. 09/2005-06 July 1, 2005, non-residents may remit as much as US$ 1mn per calendar year and that too out of balance held in NRO Account. This money may represent sale proceeds of assets acquired in India out of rupee/foreign currency funds, or by way of inheritance/legacy or settlement from a person who was a resident of India. There are many financial companies in India helping OCIs (overseas citizen of India) and PIOs (person of India origin) to invest in India, through there diversified NRI services to make investments in India.

What are the types of NRI Bank Accounts non-residents can open?

Non-residents can open Demat or NRE or NRO Account in Indian Banks.
Demat Account for NRIs:
In the advanced countries, depository systems and services have played a significant role in not only facilitating smooth online share trading and settlement but also attracting foreign investment in capital market. This is exactly what the National Securities Depositories Limited (NSDL) plans to do in India. The depository system as evolved by the NSDL enables investors to overcome all problems related to physical certificates. The Securities and Exchange Board of India (SEBI) regulate the functions of NSDL.
NRE and NRO Accounts:

Non-residents can maintain two types of Rupee Account – Non-Resident (External) Rupee Accounts (NRE Accounts) and Ordinary Non-Resident Rupee Accounts (NRO Accounts). The difference between NRE and NRO Account lies in that the funds remitted from abroad or local funds, which can otherwise be remitted abroad to the account holder, can be credited to NRE Accounts. Local funds, which do not qualify for remittance outside India, are required to be credited to NRO accounts. It may be noted that money may be transferred from NRE to NRO Account but not vice-versa, and money once credited to NRO Account cannot be transferred back to NRE Account as the money becomes non-repatriable. Apart from all this, NRIs can use these accounts to make investment in Indian mutual funds.